House DFL takes testimony on gas tax, vehicle sales tax increases

The Minnesota House DFL majority is trying to pass the biggest transportation funding bill since 2008, the last time the legislature approved a gas tax increase.

The 2008 bill created $7 billion in new funding for transportation. The 2021 bill would raise about $1.5 billion over four years.

Republicans were upset the bill and tax increases were introduced so late in the session without public hearings.

"It’s unconscionable," said Rep. Paul Torkelson, R-Hanska, during a virtual hearing of the House Transportation Finance and Policy Committee. "This is not the way the legislature is supposed to work. We’re supposed to bring these bills forward to committee, analyze them, take testimony."

The bill would link future gas tax increases to the inflation rate, along with increases in the metro area sales tax, the Motor Vehicle Sales Tax, license tab fees and higher taxes on luxury vehicle registration. Some testifiers today said the bill is unclear about what constitutes a luxury vehicle.

"The process that we’ve had over the past 72 hours has surfaced some important questions," says bill author Rep. Frank Hornstein, DFL-Minneapolis. "I take them seriously and am willing to have a conversation about them and make necessary adjustments."

The bill received support from county commission leaders in Hennepin and Ramsey counties.

"We strongly support the inclusion of sustainable, long-term transit funding via the (Motor Vehicle Sales) tax and half-cent sales tax for the Metropolitan Council," said Hennepin County Board Chair Marion Greene.

But auto dealers object to a variety of tax increases that will impact them and their customers.

"Essentially, the bill is increasing the burden on new car dealers and their customers," testified Amber Backhaus, with the Minnesota Auto Dealers Association.

Anoka County Commissioner Scott Schulte told lawmakers he opposes the metro area sales tax increase because he thinks most of it will go to projects in Hennepin and Ramsey counties. He also told the committee they should consider eliminating the North Star Commuter Rail line from Minneapolis to Big Lake.

"There’s nobody around who can say North Star hasn’t been given a fair shot," he said. "Even on its best day its numbers were horrible."

A Senate bill calls for the elimination of North Star, the House bill does not.

The House transportation bill has a few more committee stops before a vote on the House floor.